Published On: Mon, Feb 17th, 2014

Hank Greenberg’s Starr Investments Buying Healthcare Claims Company Multiplan for Over $4 Billion

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Maurice-Hank-Greenberg -- IN

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Maurice (Hank) Greenberg’s Starr Investment Holdings, in partnership with Swiss firm Partners Group, has just announced it is buying 100% ownership of healthcare claims processing technology firm Multiplan Inc.

Terms of the deal were not announced, but reports of a price of more than US$4 billion have been circulating from purportedly knowledgeable sources. And this business segment seems to be hot right now; just three weeks ago KKR agreed to buy majority ownership of another health care claims management processing firm, Sedgwick Claims Management, for US$2.4 billion as Jewish Business News reported [here].

Starr Investment Holdings of New York is a private equity firm focused on making long term investments, and an affiliate of the privately held insurance and investments conglomerate CV Starr & Co. Maurice Greenberg is CV Starr’s long time Chairman, CEO and a major shareholder. Partners Group is a global private markets investment management firm based in Zug Switzerland, and led by Co-Chief Executive Officers André Frei and Christoph Rubeli.

The sellers are two private equity firms, Silver Lake and BC Partners, who had earlier purchased Multiplan in 2010, for US$3.1 billion, from an investment group led by The Carlyle Group.

Founded in 1980, Fifth Avenue New York based MultiPlan delivers comprehensive transaction-based solutions to healthcare payers. With a network of over 900,000 healthcare providers and extensive proprietary analytics, MultiPlan claims to generate substantial savings on medical cost savings for its customers for whom it processes about 40 million claims annually.

Mark Tabak, MultiPlan’s Chief Executive Officer said, “Today’s announcement marks the next step in an exciting journey for MultiPlan,” adding “Starr’s historical relationship with MultiPlan and its executives was fundamental in bringing our firms together. With the investment led by Starr and Partners Group, we have the long-term capital, strategic support and collective set of relationships to further grow our company and evolve our solutions in the rapidly-changing healthcare market and beyond.”

Mr. Tabak also was gracious in thanking his departing shareholders: “We have enjoyed our partnership with BC Partners and Silver Lake and thank them for their contributions to our success, as well as for their leadership in several strategic and technology initiatives that strengthened the company’s growth outlook.”

Geoffrey Clark, Senior Managing Director of Starr Investment Holdings who championed the deal for Starr said, “MultiPlan operates at the center of the healthcare ecosystem and is uniquely positioned to continue to expand its service offering and drive value and cost savings for its customers.”

Finally, Joel Schwartz, a Managing Director of Partners Group in their New York office, said, “In an environment of escalating medical costs, MultiPlan’s value proposition is increasingly critical and its innovative solutions ever more impactful to corporations and, more importantly, the lives of their employees.”

And there we may indeed have the key to this deal. As the costs of providing medical care in the US have continued to escalate, and as demography points towards an ageing population in the decades ahead, everyone is trying to find ways to use technology to bring this tiger under some form of control. Accordingly, continuing advances in technology in the administrative processing of claims, which alone soaks up considerable resources, will have an increasing role to play and Multiplan is right in the middle of the business space.

To help pay for the purchase, the transaction has fully committed financing from Barclays PLC and J.P. Morgan Chase and, of course, closing is subject to regulatory approvals and customary conditions.

Multiplan is the industry’s most comprehensive provider of healthcare cost management solutions. The company provides a single gateway to a host of network- and analysis-based strategies for managing the financial risks associated with healthcare claims. Clients include large and mid-sized insurers and health plans, third party administrators, self-funded employers, HMOs and other entities that pay medical bills in the commercial healthcare, government, workers’ compensation and auto medical markets.

About Maurice Greenberg

Maurice (Hank) Greenberg, who today is aged 88, is Chairman and CEO of CV Starr & Co Inc.

Mr. Greenberg retired as Chairman and CEO of American International Group, Inc. (AIG) in March 2005, after serving as Chief Executive Officer from 1967 until March 2005. During his leadership AIG became the largest insurance company in the world and its’ market value grew from US$300 million to US$180 billion.

AIG was bailed-out by the US Government, during the financial crisis of 2008, at a cost of nearly US$183 billion. This sum was all ultimately repaid, leaving the Government with an eventual profit of over US$20 billion. Mr. Greenberg has been litigating the US government since that time over the bail out.

Mr. Greenberg is Honorary Vice Chairman of the Council on Foreign Relations. He is also the past Chairman and Director of the Federal Reserve Bank of New York.

He is Board Member and Chairman Emeritus of NewYork-Presbyterian Hospital. He serves as a member of the Board of Overseers of Weill Medical School of Cornell University and is a Life Trustee of New York University. He is on the Board of Overseers of the International Rescue Committee and is active in a number of other civic and charitable organizations.

In 1990, Mr. Greenberg was appointed by Mr. Zhu Rongji, then the Mayor of Shanghai, to be the first Chairman of the International Business Leaders’ Advisory Council for the Mayor of Shanghai. In 1994, Mr. Greenberg was appointed Senior Economic Advisor to the Beijing Municipal Government. He was awarded “Honorary Citizen of Shanghai” in 1997.

Hank Greenberg is the son of Jewish candy store owner Jacob Greenberg. His father died when he was seven, and his mother, Ada Rheingold, married again, to a dairy farmer.

When he grew up Greenberg served in the U. S. Army in Europe during the Second World War, participating in the liberation of Dachau, and in the Korean War rising to the rank of captain.

He received a bachelor’s degree from the University of Miami and his law degree from New York Law School. He was admitted to the New York Bar in 1953, and has since also received honorary degrees from several universities.

Maurice Greenberg is married and has four children.

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